Bombay High Court

Mina Fusade L/H Of Late Sayajirao ... vs Wto on 23 May, 2002

Equivalent citations: (2004) 86 TTJ Mumbai 278

ORDER

BY THE BENCH:

All the above appeals are directed against the CWT(A)'s consolidated order dated 29-12-1998. These appeals of the assessee are grouped and heard together as the identical issue is involved and they stand disposed of by this consolidated order. Appeals in WTA Nos. 20, 21 and 31 pertain to levy of penalty under section 18(1)(a) of Wealth Tax Act. The appeals in WTA Nos. 22 and 23 pertain to the orders passed under section 16(5) of Wealth Tax Act, WTA Nos. 28 and 32 pertain to penalties levied under section 180(1)(c) of Wealth Tax Act and WTA Nos. 29 and 30 pertain to penalties levied under section 18(1)(b) of the Wealth Tax Act.

2. The assessee had sought the condonation of delay in filing the appeals before CWT(A) on the ground that there was sufficient cause for the delay. However, the learned CWT(A) rejected the request for condonation of delay and did not admit the appeals on the ground that had the assessee taken due care and attention, the delay in (filing) the appeal could have been avoided. Thus, the learned CWT(A) did not dispose of the appeals on merits and dismissed all the appeals in limine.

3. In respect of all the appeals, a common letter dated 14-2-1997, addressed to the CWT(A), was filed alongwith the appeal papers seeking condonation of delay in filing the appeals against assessment orders under section 16(5) of Wealth Tax Act/penalty orders under sections 18(1)(a)/l8(1)(b)/18(1)(c) of the Wealth Tax Act. During the course of hearing of t* appeals before the CWT(A), the assessee was asked to submit separate chronological write up of events leading to delay in filing of the appeals. Subsequently, the assessee filed further submissions on 28-12-1998 vide letter dated 26-12-1998. Both the assessee's letter dated 14-2-1997 (as filed alongwith the appeal papers) and subsequent letter dated 26-12-1998, are reproduced by the learned CWT(A) in his order. The learned CWT(A) observed that the delay in filing the appeals could be condoned if the CWT(A) was satisfied that there was sufficient cause for not presenting the appeals within the specified period. Relying on certain decisions of the courts, the learned CWT(A) observed that for condoning the delay, it has to be seen "whether the assessee-appellant had acted in any manner by which the cause for delay in filing the appeal could have been avoided by due care and attention. " The learned CWT(A) further referred to the correspondence made by the TRO with the assessee and then observed that "It is evident from para No. 8 of letter dated 26-12-1998 quoted above that Ms. Mina Fusade, legal heir of late Prince Sayajirao Gaekwar of Baroda, came to know at least in the end of 1995 or the beginning of 1996 that huge demands were to be recovered from her in respect of estate of the deceased." The learned CWT(A) rejected the assessee's request for condonation of delay in filing the appeals by observing as under :

"In this connection, the learned counsel for the assessee-appellant Mr. YK Bhagwagar, C.A. who appeared before the undersigned was asked as to whether the assessee or Mr. Y.K. Bhagwagar, C.A. had made any request in writing to the assessing officers for supplying the assessment orders/demand notices to the assessee-appellant. The reply of Mr. Y.K. Bhagwagar, learned counsel of the assessee- appellant was in negative. He clearly stated that no request was made to the assessing officer in writing for obtaining assessment orders/demand notices in respect of which the instant appeals are being filed on behalf of the assessee-appellant. Therefore, it is clear that had the assessee-appellant/their Chartered Accountants taken due care and attention viz., obtaining the copies of the assessment orders/demand notices etc. from the assessing officer at least in the end of 1995 or the beginning of 1996 (on 7-2-1996 Ms. Mina Fusade wrote a letter to the TRO-13 informing that she had consulted Shri Y.K. Bhagwagar & Co., C.As. and had entrusted all her tax matters to them), the assessee-appellant could have filed the instant appeals much earlier (the instant appeals are filed on 7-5- 1997/2-5-1997, as the case may be)."

In view of the above, all the appeals were not admitted by the CWT(A) and they were dismissed in limine.

4. The learned counsel took us through the assessee's letters dated 14-2-1997, and 26-12-1998 filed before the CWT(A) in connection with the reasons given for the condonation of delay in filing appeals before the CWT(A). The learned counsel of the assessee contended that the assessee's counsel had approached the assessing officer for supplying the copies of the assessment orders/penalty orders and demand notices several times but the copies of the assessment orders/penalty orders could be received only on 28-2-1997. In this regard, the learned counsel referred to the copies of assessment orders/penalty orders filed in the appeal papers before us and pointed out to the date put by the assessing officer below his signatures on the certified copies of such orders. The date is either 28-2-1997 or 25-2-1997/26-2-1997. The learned counsel further stated that after receiving the certified copies of the assessment/penalty orders, the assessee filed appeals on 10-3-1997, before the CWT(A), Central-I, who accepted the appeals against the assessment orders passed under section 16(5) of the Wealth Tax Act but refused to accept appeals against penalty orders by holding a view that he had no jurisdiction. The learned counsel pointed out that on 13-3-1997, the assessee moved an application before the Chief CIT to decide about the jurisdiction of the appeals because the assessment records of the assessee had been transferred from Baroda to Bombay. It was stated that Chief CIT issued a letter dated 17-4- 1997 (received by the assessee on 26-4- 1997) wherein the learned Chief CIT had given the decision that the jurisdiction lay with CWT(A)-III, Bombay. Thus, according to the learned counsel, after receiving the Chief CIT's decision about the jurisdiction on 26-4- 1997, the assessee filed all the penalty appeals before the CWT(A)-III, Bombay, on 2-5-1997. It was also pointed out that a request was made to CWT(A), Central-I, Bombay, on 2-5-1997 to transfer the appeals filed with him against assessment orders under section 16(5) of Wealth Tax Act to CWT(A)-III, Bombay. It is further pointed out that CWT(A), Central-I, Bombay, transferred the quantum appeals (appeals against the assessment orders) to CWT(A.)-III, Bombay, on 7-5- 1997. Thus, according to the learned counsel, the assessee having received certified copies of the assessment orders/penalty orders on 28-5- 1997, the appeals filed with the CWT(A)-III, Bombay, on 2-5-1997 or transferred by CWT(A), Central-I, to the former on 7-5- 1997, were in time or should be treated as having been filed in time.

4.1 The learned counsel further contended that the will was executed by the deceased on 7-5- 1985 (relevant papers available at pp. I to 4 of the compilation). It was further stated that on I-3-1995, the Bombay High Court granted that probate to the assessee (copy available at p. 6 of the compilation). It was further stated that step-mother of the deceased Shri Sayajirao P. Gaekwar challenged the will of the deceased but the Bombay High Court dismissed the petition vide order dated 21-3-1996 (copy at p. 7 of the compilation). Thus, according to the learned counsel, the assessee became legal owner of the property only on 21-5-1996. It was stated that the assessee addressed a letter to the TRO on 7-5- 1996 (copy at p. 11 of the compilation) stating that relevant documents pertaining the assessment/penalty orders were not available with the assessee and the assessee was in the process of collecting xerox copies of the documents from the department. It was pointed out that only on 10-10-1996, the assessee was allowed to carry out inspection of the record by the department and the certified true copies of the assessment/penalty orders could be obtained by the assessee only on 28-2-1997. Thus, according to the learned counsel, either there is no delay in filing the appeal or if there is any delay at all, that should be condoned and the matter should be restored to the CWT(A) for deciding the appeal on merits.

4.2 Coming to the merit of the addition, the learned counsel contended that net wealth consists of only one open plot of land at off Napien Sea Road and behind Simla House admeasuring 10433.19 sq. mtrs, which is occupied by 600 to 700 slum dwellers. It was stated that the plot is still in occupation of slum dwellers and slum dwellers have attempted to make illegal sale of the said plot to a builder but the timely legal action taken by the assessee prevented this illegal dealing. Referring to p. 23 of the paper book, the learned counsel contended that in assessment year 1986-87, the department had assessed the net wealth of the assessee at Rs. 10 lakhs and hence the value adopted in the assessment years under appeal exceeding Rs. 2 crores is without any justification. The learned counsel also referred to the order of the CWT(A), Central-I, for the assessment years 1979-80 and 1980-81 (available at p. 13 of the compilation) and contended that the DVO had conceded before the learned CWT(A) that mandatory opportunity, as required under the provisions of section 16A(4) of the Wealth Tax Act was not given to the assessee before completion of the valuation report dated 20-2-1982. It was pointed out from the CWT(A)'s order that the CWT(A) had observed that "the value of the land has been adopted on the basis of above referred valuation report dated 20-2-1982, which is arbitrary and invalid. The assessment orders which are based on such an invalid and arbitrary report, are therefore, bad in law." The learned counsel contended that assessments for the subsequent year were based upon the same valuation report dated 20-2-1982, which was held as arbitrary and invalid by the CWT(A), Central-I.

4.3 The learned counsel then proceeded to distinguish the case laws relied upon by the CWT(A) in his impugned order. These case laws are : (1) Raja Jagdambika Pratap Narayan Singh v. CBDT (1975) 100 ITR 698 (SC) 705 and (2) Shrimant Govind Rai & Ghorpade v. CIT (1963) 48 ITR 54 (Bom). Reading out the relevant facts from these judgments, the learned counsel pointed out that these decisions were not applicable because of the peculiar facts of the assessee's case. The learned counsel relied upon the following decisions in support of his contentions

(1) Collector, Land Acquisition v. Mst Katiji & Ors. (1987) 167 ITR 471 (SC).

(2) N. Balakrishnan v. M Krishnamurthy (1998) 7 SCC 123.

(3) order of the Tribunal, Bombay Bench 'D', in ITA Nos. 3389/3390/Bom/1994 for the assessment year 1988-89 dated 30-4- 2002 in the case of Smt. Raieshwaridevi Sadajiwatlal for the assessment years 1987-88 and 1990-91.

5. On the other hand, the learned departmental Representative relied on the order of the CWT(A) and contended that there being no sufficient cause for the delay in filing the appeal, the CWT(A) was justified in dismissing the assessee's appeal in limine.

6. We have given a careful consideration to the rival submissions and the facts of the case in the light of the material brought to our notice. The assessee was located in a foreign country and had to depend on her Chartered Accountant for the tax matters. The Chartered Accountant, who was handling assessee's tax matters, did not perform his duties properly which resulted in high pitched assessments and consequent levy of heavy penalties and interest. The assessee has explained the reasons for the delay in filing the appeals. The assessee got certified copies of the assessment/penalty orders only on 28-2-1997. When the assessee filed appeals before the CWT(A), Central-I, on 10-3-1997, the dispute arose regarding the jurisdiction and the Chief CIT had to decide regarding the Commissioner (Appeals) with whom the proper jurisdiction rested. The Chief CIT's decision was communicated to the assessee on 26-4- 1997 and the assessee filed appeals with CWT(A)-III on 2-5-1997. The quantum appeals earlier filed with CWT Central-I, were transferred by him to CWT(A)-III on 7-5- 1997. The assessee became legal owner of the property only on 21-3-1996 and after carrying out the inspection of the records in the department on 10-10-1996, the assessee could obtain the certified copies only on 28-2-1997. Keeping in view all the facts as mentioned by the assessee in his letters dated 14-2-1997 and 26-12-1998 filed before the CWT(A) and considering the arguments of the learned counsel given before us, we are of the opinion that there was sufficient cause for the delay in filing the appeals before the CWT(A). We hold that on the facts of the case the learned CWT(A) should have condoned the delay and disposed of the appeals on merits. In holding this view, we have considered the judicial pronouncements relied on by the learned counsel of the assessee. In the case of N. Balakrishnan v. M. Krishnamurty (supra), the Supreme Court observed as under:

"The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. Rules of limitation are not meant to destory the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. The law of limitation is thus, founded on public policy. It is enshrined in the maxim 'interest republicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to deestory the rights of the parties. They are meant to see that parties do not resort to dilatory tacties but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. (paras 10 and 11)

Condonation of delay is a matter of discretion of the court. Sec. 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. In every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of male fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. The words "sufficient cause" under section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice. (paras 9, 13 and 12).

In the other judgment (1987) 167 ITR 471 (SC) (supra), the Hon'ble Supreme Court had held that expression "sufficient cause" is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that, being the life-purpose of the existence of the institution of Courts. The Hon'ble Supreme Court has held that a justifiable liberal approach has to be adopted on principle. The Supreme Court has held that :

"When substantial justice and technical considerations are pitted against each other the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay."

6.1 In view of the above facts and in the light of the judicial pronouncements discussed above, we are of the opinion that it is a fit case for the condonation of delay in filing the appeals before the CWT(A). Therefore, the delay is condoned. All the nine appeals are restored to the file of the CWT(A) for disposing of the same on merit.

6.2 As the appeals are restored to the file of the CWT(A), for deciding the appeals on merit, the other grounds of appeal pertaining to the additions made are not required to be dealt with by us as this stage. Therefore, the arguments of the assessee given in this regard are not considered.

7. For statistical purposes. The assessee's appeals are treated as allowed.